The S&P 500 has dipped 0.4% to 1,804.04, while the Dow Jones Industrial Average is off 0.2% at 16,143.57. Microsoft has fallen 0.7% to $36.32, Johnson & Johnson has dropped 1.3% to $91.46, and Procter & Gamble has declined0.9% to $81.61. In the S&P 500, Darden Restaurants (DRI) has fallen 6.3% to $49.60 after it said it would sell Red Lobster, and AbbVie (ABBV) is down 3.3% at $52.55 after getting downgraded by Morgan Stanley.

The market didn’t fear the taper yesterday, but is may be having second thoughts today. It doesn’t help that the first piece of new economic data was, well, ugly. Some 370,000 Americans filed for first-time jobless benefits last week, well above forecasts for 334,000 new claims and the highest since March. The Philly Fed Index, meanwhile, came in at 7, below forecasts for 11, and existing-home sales were also light.

Like last week, this weeks lousy jobless claims number can be blamed on Thanksgiving. and say that was probably the case this time around too. Don’t expect the seasonal distortions to ease anytime soon, say Jefferies’ Ward McCarthy and Thomas Simons. They write:

The volatility of jobless claims over the past several weeks has primarily been a function of faulty seasonal adjustment factors generating and exacerbating calendar effects. The problems date back to Veteran’s Day, the biggest problems revolving around the late Thanksgiving has generated some of the recent extreme readings. The bottom line is that it will be a few more weeks before claims settle into levels that are indicative of the underlying labor market fundamentals. So far as assessing the December employment data is concerned, jobless claims are unlikely to provide any useful insight.

With Christmas, New Year’s Day, and Martin Luther King Jr. Day all coming up over the next several weeks, holiday-related seasonal adjustment problems will probably continue to be the main driver of volatility in the claims data.

Pavilion Global Markets Pierre Lapointe and team tell investors that despite volatility that almost certainly will accompany the Fed’s tapering, they should have faith in the U.S. economy and stock market. They write:

After four years of unconventional measures, the U.S. will start to normalize its monetary policy in 2014. This normalization could bring some short-term volatility, but investors will soon realize that the economic backdrop is conducive to a continuation of the expansion phase that started in 2009…

While it is true that the S&P 500’s forward P/E of 14.9 times in the U.S. is the highest level since the end of the recession, it cannot be considered expensive on an historical basis. Additionally, we cannot rule out a price multiple expansion in 2014.

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.